January 25, 2017
In its second arbitration since the institution of the UFC Anti-Doping Policy,UFC Fighter Felipe Olivieri was handed a two year suspension after he was provisionally suspended for an Anti-Doping Policy Violation on March 10, 2016.
The decision can be found here.
The suspension is due to a failed out of competition test on January 11, 2016 while he was training Brazil. Notably, Olivieri’s brother died 5 days prior to the test occurring. Also of note, the test results were not discovered until after his January 30, 2016 fight against Tony Martin in which he lost by 3rd Round TKO. He took an in-competition test that night and those results were negative.
On March 4, 2016, the results of the A sample from the January 11th test came up positive for the presence of methyltestosterone metabolites, 5alpha-tetrahydromethyltestosterne and 5betatetrahydromethyltestosterne. On March 29, 2016, the B sample came back positive for 5alpha-tetrahydromethyltestosterne and 5betatetrahydromethyltestosterne.
Among his defenses, Olivieri challenged the accreditation of the lab that analyzed the tests as on June 24, 2016, WADA issued a press release announcing that it had suspended the accreditation of the Rio Laboratory “due to a non-conformity with the International Standard for Laboratories. Olivieri’s legal counsel argued that the samples had been mishandled by the lab staff and the chain of custody had been compromised citing the WADA suspension.
Under objections from Olivieri’s attorney, a Utah lab confirmed the results from the Rio Lab. Of course, Olivieri’s attorney claimed that the samples were already compromised and they could not render a conclusive result.
The arbitration panel stated that the fact that the suspension occurred in June 2016 and the results of the test happening on March 2016 does not negate the results. The panel noted the Utah lab had confirmed the Rio Lab’s results.
In the end the arbitrators determined Olivieri had failed to provide an acceptable explanation of why there was a positive result for testosterone. There were no mitigating circumstances and thus the “appropriate sanction” per the arbitrator was a 2 year suspension which will end on March 9, 2018.
This is the second arbitration result that yielded a result favorable to USADA. While Olivieri’s attorneys had procedural arguments to the reasons for his drug tests, they did not provide the ultimate answer for the arbitrator which was why Olivieri had the presence of testosterone androgens in his system. Perhaps his attorney was seeking a possible reduction of a two year suspension for the 31 year old fighter. Unfortunately for Olivieri, not only will he have to serve a suspension, he is out of pocket the legal fees necessary to challenge his Anti-Doping Policy Violation.
January 25, 2017
Netflix has acquired the worldwide rights to the documentary “Nobody Speak: Hulk Hogan, Gawker and Trials of a Free Press,” according to The Hollywood Reporter. The documentary is about the case that brought down media company Gawker due to a short video it published of a sex tape involving the former wrestler.
As you may recall, a jury handed Hogan a $115 million verdict which brought Gawker and its founder Nick Denton to bankruptcy. It also destroyed the career of A.J. Daulerio who has been negotiating a settlement with Hogan although he would like the right to write his own book (presumably) about the case.
The documentary is screening in the Sundance Film Festival’s U.S. Documentary Competition.
The purchase of the rights reflects the aggressive nature of Netflix strategy to go after intriguing content. It continues to pick up subscribers and its original productions are gaining notoriety. The case and its characters are primed for more than this documentary as you might expect more retellings of the trial.
Payout Exclusive: Interview with Alliance MMA’s Robert Haydak and Suckerpunch Entertainment’s Bryan Hamper
January 25, 2017
MMA Payout had the opportunity to speak with Alliance MMA’s Robert Haydak and Suckerpunch Entertainment’s Bryan Hamper.
The two spoke about the acquisition of the fighter management company and how it helps both companies going forward.
Among the top-level fighters Suckerpunch represents includes Max Holloway, Joanna Jedrzejczykand Germaine da Randamie.
Haydak, president of the publicly traded MMA company stated that he knew of Suckerpunch from his previous relationship with them as the head of his own promotion. “I’ve known them for a number of years. We have a good working relationship. I’ve watched their company grow since Cage Fury (Haydak ran Cage Fury prior to establishing Alliance MMA). I have a lot of respect for them and a lot of their top athletes.” Bryan Hamper, head of Suckerpunch MMA, added, “We fell in love with the model [of Alliance MMA]. We really felt it was a fit the way going forward.”
Hamper noted that the internal production staff of Alliance MMA would help its stable of young up and coming fighters: “We can now film our fighters using high quality content and send our videos. It’s no longer cell phones. It’s a better finished product to market.”
Suckerpunch currently has 103 athletes. “We have less than 3% performing in Alliance MMA,” said Hamper. “The lionshare of the company is in the UFC, Bellator and Invicta.”
Hamper stated that the Alliance MMA acquisition is “not an exclusive deal.” He explained that any of its fighters are still free to fight on regional cards that are not associated with Alliance MMA. Hamper noted that the management company tries to be selective with its representation. “We have an internal system of where guys are at. For us it’s not about volume business. We want to bring in high-character guys.”
“Working with Alliance MMA gives us the bandwith to expand,” said Hamper. According to Hamper, the acquisition will free up Suckerpunch to go after more prospects while Alliance MMA will assist with the corporate work. “We will really focus on sponsorship engagement.” Hamper noted that Suckerpunch recently secured several sponsor and appearance deals for UFC interim Featherweight Champ Max Holloway outside of the octagon. He notes that sponsorship deals are still out despite restrictions made by the UFC.
“We think we have 15 guys on the cusp of being in the UFC,” Hamper said of the current state of his prospects. He indicated that he would like to bring on 10-15 clients a year. “We have the ability to market them like our top-rated fighters.”
“Suckerpunch under Alliance MMA will continue to operate under their own brand,” said Haydak. “Their brand identity is not going anywhere.” Similar to its other acquisitions, Alliance MMA has purchased the company but the acquired business will operate under its own name. He indicated that the company will likely add more assets to the publicly traded company. “Obviously, taking a look at our business plan, we are continuing our strategy in 2017. There will be several acquisitions made this year.”
Under the new owners, Suckerpunch will continue with managing its fighters. Hamper added, “[R]ight now, we’re looking at our growth perspective going forward. We are excited about the growth and making sure our top prospect guys are getting looks in 2017.”
The two addressed the potential issue of the acquisition of the management company conflicting with also being a promoter of MMA events. This may be an issue if legislation to the expansion of the Ali Act to MMA is passed.
Hamper reiterated that, “Less than 3% of our athletes are competing for Alliance MMA [promotions]. It’s a very small piece.”
“Definitely it’s something we considered when looking at this acquisition,” Haydak stated. “We are monitoring the Ali Act. Less than 3% of Suckerpunch fighters fight within Alliance. If the Ali Act (is expanded), it would not happen to have impact on our operations. A lot of promotions are managing athletes. We are completely transparent. We are putting the athletes first.”
Hamper added, “From my perspective, transparency is a key element. Opponents and matchup approvals come from athletic commissions. We’re governed by athletic commissions. I think we’re taking broad steps.”
An expansion of the Ali Act would create a firewall between managers and promoters.
January 20, 2017
Chris Liddell, the global CFO at WME-IMG has taken a post with the newly installed Trump Administration as reported by Deadline.com and the Hollywood Reporter.
As we know, WME-IMG purchased the UFC this past summer. Ari Emmanuel, the former Hollywood agent for President Donald Trump, met with Emmanuel shortly after he was elected president. The substance of the discussions was not made public. Despite their relationship, Emmanuel is considered someone that supports Democrats.
Liddell will take on the role of adviser and has been named an assistant and director of strategic initiatives for the new administration. He had provided advice to President Trump in appointments during the post-election transition.
The appointment is key if you are one to connect dots. The expansion of the Ali Act to include combat sports (i.e., MMA) is still an active bill in the House. The UFC is opposed to this legislation and has lobbied against it. The appointment of Liddell to a post within the Trump Administration might be the death knell for the success of passing this bill. While we might believe that all parties will have an open mind on the bill, you have to wonder if a former executive of the company that owns the UFC would advise the President to veto such legislation if it got to that point. More likely, the bill gets buried before even getting to the Senate.
January 19, 2017
The United States District Court for the Southern District of New York denied a request by attorneys for World of Boxing, L.L.C. to continue the February 6, 2017 trial date.
For background on the case, see our post here. Essentially, the parties are suing each other over a failed fight in Russia due to an alleged failed test by Povetkin and Wilder’s subsequent actions after he learned of the drug test. There is also an issue of over $7 million held up in escrow due to the failed fight.
Notably, the court order identifies a September 26, 2016 hearing in which the parties wanting an “expedited trial” and agreeing on the February 6th trial date. The parties agreed to the sole issue of whether Alexander Povetking ingested Melodonium after it was formally banned on January 1, 2016.
World of Boxing has complained of discovery issues in which Wilder’s attorneys claimed privilege for certain emails between purported agents of Wilder and his attorney.
MMA Payout will keep you posted on the case as it heads to trial.
January 12, 2017
The Al Haymon-Golden Boy antitrust lawsuit filed in federal court in Los Angeles is set for trial on March 14, 2017 if the court does not grant the defendant’s Motion for Summary Judgment.
For a good refresher on what this case is about and the gist of the motion, you can read Paul Gift’s synopsis last month. We take a deeper dive in the legal issues of the motion below.
An oral argument for the motion was taken off calendar (i.e., cancelled) by the court this past November 28th. As of this date, there has been no ruling issued by the trial court. Realistically, there is no timeline for the court to render a ruling on the motion except for the fact that there would likely be an opinion prior to trial documents needing to be filed with the court.
Haymon’s Motion for Summary Judgment
Haymon’s attorneys, and the attorneys for his entities that were also sued in this litigation argue that Golden Boy failed to establish a triable issue of fact of its attempted monopolization. It essentially argues that there is no evidence of specific intent for a monopoly, Golden Boy failed to identify any anticompetitive or predatory conduct and Golden Boy misconstrues the concept of antitrust injury.
One of the claims set forth by GBP is that Al Haymon should be held individually liable for violation of the antitrust laws. Haymon attorneys assert that Haymon could not be liable of antitrust injury because individual liability requires “inherently wrongful” conduct, a per se violation. Haymon argues that attempted monopolization is not properly evaluated as a per se antitrust violation.
In an antitrust case, there are two ways a court looks at whether there is a violation of the antitrust laws. The first is a “per se” violation and the second is the “rule of reason.” Per se relates to conduct that is manifestly anticompetitive with limited potential for procompetitive benefit. The rule of reason is the presumptive or default standard and the general standard it examines whether the procompetitive benefits outweigh the anticompetitive effect.
“Inherent conduct” is equated to a “per se” violation by Haymon. In its moving papers, they state that courts have regularly dismissed claims against corporate officers in cases dealing with conduct that is permitted or even encouraged by the antitrust laws. Here, the argument is that Haymon and his entities did not do anything wrong.
It also argues an “even if” scenario providing the hypothetical that if a court were to analyze the tying claim as a “per se” claim it would fail on the merits. It first argues that there is no tie in the first place. Haymon points out the similar Top Rank lawsuit in citing that Top Rank failed to prove as a matter of law that the two distinct services of promotion and managing were tied together. The clause in the contract that is questioned is the provision that requires consent to enter into contracts. However, Haymon’s attorneys point to the Canelo Alvarez-Amir Khan fight in May 2016 as an example of interpromotional fight making. Also, the Floyd Mayweather-Manny Pacquiao case is another example which reflected the opportunity for a contracted Haymon fighter to work with another promoter. Thus, the examples show that the contracts do not foreclose other promoters.
Haymon argues that the market described by GBP are artificial and are “illogical, divorced from the reality of the boxing industry, and fail to satisfy GBP’s burden to establish coherent markets in which the Defendants could possibly have market power.” It states that “Championship-Caliber Boxers,” the market described by GBP in its lawsuit is not a recognized industry term. Haymon attorneys identify the fact that the term was interpreted differently by multiple people within the boxing industry. They also argue that GBP has not shown that there are barriers to entry in the markets for which they define.
Golden Boy Theory of Antitrust Injury
As you might recall Golden Boy brought a lawsuit against Al Haymon and his entities illegal tying of its managerial and promotional services.
As we wrote:
The lawsuit claims that Haymon, et. al have created a “tying” relationship in violation of antitrust laws. This is done through agreements affecting to separate relevant markets. The first market is for management of Championship-Caliber Boxers and the market for promoters. As described in the Complaint, the management market is the “tying” market whereas the promotion market is the “tied” market. Essentially, the fact that Haymon manages so many fighters it affects the promotions market since he has exercised control over the direction of each fighters’ career.
Tying under Section 1 of the Sherman Act must show:
- There is evidence of a tie;
- There is evidence “of coercion” of purchasers to buy products or services;
- There is evidence of market power in a properly defined market.
Golden Boy opposes the motion on the grounds that Al Haymon is personally liable for antitrust injury. It suggests that the standard for individual antitrust liability is met when an officer knowingly approves to each element of a claim whether or not the claim involves “inherently wrong” conduct. It also states that it has ample evidence to support their tying claim as Haymon tied their management services to the rejection of competitors’ promotion services in favor of their own. Also, it rebuts the assertion by Haymon that it has fabricated the relevant market definition. It also contends that there are “significant barriers to entry” in the relevant markets. Finally, it states that the Haymon acted as promotes as well as managers.
GBP claims that issues of fact exist as it relates to the evidence of exclusionary contracts which “tie out” others. It also claims that its expert’s testimony provides ample evidence of the markets in the industry and that they are controlled by Haymon.
In its opposition to the motion for summary judgment, GBP argues that Haymon’s model of paying supracompetitive sums is not a “rational business model, unless there is to be a payoff.” The “payoff” as concluded by GBP is the monopoly of the boxing promotion business, controlling the television market for boxing and “invoking supracompetitive pricing once dominance is obtained.”
The opposition points to “draconian exclusionary terms” in contracts which give Haymon Sports control over all aspects of the boxer’s career and a veto right over all boxing related contracts. In its pleadings, Haymon does admit that a “standard management agreement gives it the right to approve the boxer’s selection of promoter, it has never exercised this right to require or coerce its boxers to use or not use a particular promoter.” This seems to negate, but confirm terms within the Haymon boxing management contract that reflects control over the boxer’s selection of promoter.
GBP also argues that Haymon has a tying arrangement in which one must refrain from accepting another product. Here, GBP contend that Haymon tied his management services to the rejection of competitors’ promotion services. They suggest that fighters under contract with Haymon know that they cannot work with other promoters outside of Haymon. GBP indicates that this is a triable issue of fact that would
The standard on a motion for summary judgment is to weigh all of the pleadings and facts within and weigh them in the “light most favorable to the non-moving party (in this case GBP).” If the court determines that there are no genuine issues of material fact, it will grant a dismissal as a matter of law. However, a court will deny a motion for summary judgment if there are pending issues of fact.
Whether or not Haymon could be individually liable will be an issue the court will need to determine based on the facts provided and the legal arguments made by the parties. While Haymon’s attorneys argue that personal liability cannot be assessed in these matters, Golden Boy argues that case law supports the contention that Haymon is personally liable. As for the business model, the fighter contracts will be an issue for the court to consider as well as GBP’s expert testimony which addresses the relevant markets.
Once a decision is rendered, MMA Payout will let you know
January 10, 2017
UFC Heavyweight Mark Hunt has filed a lawsuit against the UFC, Dana White and Brock Lesnar in the District Court of Nevada on Tuesday. The lawsuit stems from Hunt’s fight against Lesnar at UFC 200.
Hunt is claiming violations of the Racketeer Influenced Corrupt Organizations Act, Conspiracy to Commit Racketeering, Fraud, False Pretenses, Breach of Contract, Breach of Covenant of Good Faith and Fair Duty, Negligence and Unjust Enrichment.
The premise of the complaint is that the UFC allowed Lesnar to fight at UFC 200 while providing the WWE wrestler with an exemption from the UFC’s anti-doping policy.
Lesnar tested positive for a banned substance in both an out-of-competition and in-competition drug test.
Lesnar defeated Hunt via unanimous decision at UFC 200 this past July.
The Complaint makes reference to UFC 152 when Vitor Belfort was allowed to fight with a testosterone use exemption but without disclosing the information to the public or his opponent Jon Jones.
In the lawsuit is embedded a photo of Lesnar pummeling Hunt.
In Hunt v. Zuffa, LLC, et al., complaint embeds a pic with the caption, “Doping Lesnar Fights Hunt, a clean competitor, at UFC 200.” pic.twitter.com/Q4HCcUAIvc
— Jason Cruz (@dilletaunt) January 11, 2017
Of the notable items in the Complaint, Hunt claims RICO violations against the UFC which carry treble (3 times) damages.
He also claims personal injuries which include damage to reputation, loss of opportunity of career advancement and further earning potential.
Hunt has intimated that he may take legal action and he did. The timing comes after Lesnar was recently handed 1 year suspensions from USADA and the Nevada State Athletic Commission which meant that he could come back in July 2017.
RICO is a very specific statute that requires that a person must commit at least two acts of racketeering activity from a set of crimes within a specific time frame and are related to an enterprise. This will be interesting for Hunt to prove and would make discovery as interesting as the current antitrust lawsuit filed by former fighters.
Hunt is scheduled to fight in March 2017 which makes this lawsuit all the more interesting.
MMA Payout will keep you posted.
January 9, 2017
Zachery Light is dismissing his lawsuit against Bellator. Light’s attorney filed a Request for Dismissal on December 20, 2016.
The Request was signed by Light’s attorney, William Crosby, and Bellator’s counsel Richard Kendall.
The dismissal is “with prejudice” which would end both Light’s lawsuit against Bellator and Bellator’s cross-claim against Light. The details can be found here and in the original lawsuit in which Light stated that the promotion disobeyed laws for forging medial information for fighters. Light claimed that Scott Coker and Rich Chou advised the former Bellator employee not to press the issue.
Bellator claimed that Light requested a loan from the company and was given $9,403 and entered into a written agreement with Light that made him pay back the money on an agreed schedule. Bellator claims that he never paid back the loan.
In all likelihood, the parties have decided to settle their dispute without incurring further litigation costs. Also, I would suppose a non-disclosure agreement was signed by Light which would preclude him from talking about the case. It would be interesting to know of the allegations regarding Bellator hiring Kogan while he still managed fighters. Of course, Light probably could not sustain paying his legal bills up against Bellator. From all indications, he is now working for MMAAA.
January 7, 2017
2016 seemed to be a low-key year in the world of boxing. While 2015 saw some major moves from Al Haymon and his Premier Boxing Champions, the endeavor has fizzled. The same could be said for the year of boxing on PPV as there were no major events that drew PPV buy rates the likes of Mayweather or Pacquiao in their primes.
We saw less of Haymon’s Premier Boxing Champions on the multiple channels it was on the year prior. PBC has blown through a lot of capital since it launched in March 2015. A lawsuit filed by Golden Boy, one of two filed by rival organizations, is set to go to trial in March 2017.
Currently, Haymon and the entities sued by Golden Boy have filed a motion for summary judgment to dismiss the case prior to the trial date. No decision has been made as of this date.
The other antitrust lawsuit against Haymon, filed by Top Rank Boxing was settled by the parties this past spring.
Both of the lawsuits claimed that Haymon’s PBC business model sought to create an illegal tie-in through Haymon’s signing of fighters as their management and then promoting them. They also argued that PBC foreclosed the fighter market and possibly promoting the fighter since fighters under Haymon would allegedly not deal with other promoters. It also tied-out promotions that sought to be on television since Haymon struck exclusive deals with multiple networks.
Chris Algieri fought this past April but expressed concern with how much he would be paid as his promoter did not reveal how much of a percentage he would receive from his fight against Errol Spence, Jr. The situation brought up an issue with the Ali Act.
Speaking of Spence, after defeating Algieri his next fight in August drew an impressive 4.8 million viewers on NBC with a peak of 6.34 million. The PBC on NBC fight aired after the U.S. Olympic gold medal basketball game between the U.S. and Serbia. The one-hour show was sandwiched between Olympic network coverage which may have attributed to the huge viewership which seems to be an anomaly when compared to past PBC on NBC telecasts.
Deontay Wilder and his promoter Lou DiBella are embroiled in a lawsuit with Alexander Povetkin and his promoter World of Boxing, LLC over a failed fight that was set to happen in Russia in May. Povetkin tested positive for Meldonium. However, he claimed that only small traces were found in his sample and his use occurred prior to January 1, 2016 when WADA banned the substance. The WBC reinstated Povetkin because the substance in his system was below the threshold accepted by WADA although it claimed to require Povetkin to submit to drug tests. The parties are embroiled in a discovery fight but the case is set to go to trial this spring.
Notably, Povetkin tested positive after he was reinstated and scheduled to face Bermane Stiverne for the WBC heavyweight title. He stated that he wanted his “B” sample tested on Thursday at the UCLA Laboratory in Los Angeles.
DiBella is one of the boxing promoters that protested the new law legalizing MMA in New York, but requiring promoters to provide $1 million worth of coverage per athlete in the event of a life-threatening brain injury. He pulled the rest of his shows scheduled for New York in late October as a form of protest and as a matter of practicality. Jo DeGuardia of Star Boxing along with DiBella submitted a public comment regarding the regulations.
A survey of all of the fights on HBO, including PPV replays, drew an average of 780,000 subscribers of the premium channel. The highest-rated fight this year was GGG versus Dominic Wade on April 23rd which drew over 1.3 million viewers. Only two other fights reached past 1 million viewers: Sergey Kovalev versus Jean Pascal which drew 1.179 million viewers in January and Andre Ward versus Sullivan Barrera which drew 1.064 million viewers.
Showtime had less fights this year and drew an average of 363,000 viewers.
In May, a year after the “Fight of the Century” between Manny Pacquiao and Floyd Mayweather, Jr. resulted in a lawsuit as Showtime sued Top Rank citing indemnification and breach of contract related to lawsuits filed by third parties against Showtime and Top Rank related to Pacquiao’s claim that he fought with an injury against Mayweather. Showtime sought to invoke the indemnification language in the contract. However, Top Rank, as you might expect, disagreed with the reading of the contract. In fact, they intended to bring a motion to dismiss Showtime’s lawsuit.
But, in September, Showtime voluntarily dismissed its case.
Finally, it was a rather disappointing 2016 for boxing PPVs.
Boxing PPVs 2016
April 9, 2016 – Pacquiao-Bradley III: ~400K PPV buys
May 7, 2016 – Alvarez-Khan: ~450K-600K PPV buys
July 23, 2016 – Crawford-Postol: 50K-60K PPV buys
September 17, 2016 – Alvarez-Smith: >~300K PPV buys
November 5, 2016 – Pacquiao-Vargas: ~300K PPV buys
November 19, 2016 – Ward-Kovalev – 160,000 PPV buys
An unfair comparison, except for this web site I suppose, but if you consider the UFC had its most successful year on PPV with 5 events going over 1 million, boxing had a dismal year. Canelo Alvarez, the predicted heir to boxing PPV, did not draw as expected and Manny Pacquiao is losing his appeal in the U.S. Note that HBO passed on distributing his November fight in order to promote a fight that drew just 160,000 on PPV. Unless GGG-Canelo happens in the fall of 2017, there are not any marquee PPV fights coming up in boxing this year.
January 4, 2017
Brock Lesnar was issued a one year suspension by USADA for failing an out of competition and in-competition drug test for UFC 200. Lesnar will be reinstated on July 15, 2017.
A portion of the USADA press release announcing the sanction reads:
Lesnar, 39, tested positive for clomiphene and its metabolite, 4-hydroxyclomiphene, following an out-of-competition urine test conducted on June 28, 2016, and an in-competition urine test conducted on July 9, 2016, at UFC 200 in Las Vegas, Nev. Clomiphene is a prohibited substance in the category of Hormone and Metabolic Modulators and is prohibited at all times under the UFC Anti-Doping Policy, which has adopted the WADA Prohibited List.
Last month, Lesnar entered into a settlement with the Nevada State Athletic Commission regarding the same drug test failure. He received a one-year sentence and $250,000 fine.
The drug has the ability to double testosterone levels. It is generally used as a fertility drug that causes the pituitary gland to release hormones. Notably, Lyoto Machida’s suspension of 18 months was for 7-keto-DHEA which helps burn fat.
The suspension was more or less expected after Lesnar settled with the NSAC. Of course, the disparity in suspensions we mention with Lyoto Machida have to be frustrating. The drug taken by Lesnar could aid him in fighting and I’m sure Mark Hunt its upset about this suspension. On the other hand, Machida’s banned substance helps burn fat so that you can make weight. The suspension reflect the issues with the UFC anti-doping policy overseen by USADA.